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EXHIBIT 10.53
SEPARATION AND RELEASE AGREEMENT
I, Xxxxx Xxxx, elect to sever my employment relationship with Gargoyles,
Inc. (the "Company") under the terms below. I understand that by signing this
Separation and Release Agreement (this "Agreement"), I will receive compensation
and benefits from the Company in addition to what is ordinarily offered to
employees who voluntarily resign and greater than provided under terms of my
employment agreement with the Company.
RECITALS
A. On March 22, 1995, the Company and I entered into an Employment
Agreement, pursuant to which I became the Vice President Sales (the "Employment
Agreement").
B. I now desire to sever my employment relationship with the Company
and to resolve the terms of such severance and all differences between us.
AGREEMENT
1. Resignation of Employment. By signing this Agreement, I am resigning
my employment with the Company effective February 2, 1998. I am also resigning
all of my positions as an officer of the Company and as an officer of any
subsidiary of the Company. By signing this Agreement, the Company is accepting
my resignations.
2. Severance Benefits.
(a) Base Pay; No Draw. I understand that I will receive my base
pay through February 2, 1998 (the "Termination Date"), from which normal and
authorized withholdings and deductions will be made. I understand that my base
pay will be paid to me in accordance with the Company's twice-monthly payroll
schedule. I understand that I will not be receiving any amount attributable to a
draw against sales commissions for the period from January 1, 1998 through the
Termination Date.
(b) Draw for Prior Periods Waived. I understand that by signing
this Agreement, the Company is agreeing that I will not be required to reimburse
the Company for any sums that I have received as draws against unearned sales
commissions, which unearned commissions total approximately $25,998.00 as of the
Termination Date, and that the Company is waiving all rights to reimbursement of
any such unearned commissions for all periods prior to the Termination Date.
(c) Expense Reimbursement; Payment of Product Account. I will be
reimbursed for any reasonable expenses incurred by me on behalf of the Company,
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subject to the receipt by the Company of all supporting documentation, with my
last paycheck. Any amounts remaining unpaid as of the Termination Date on my
account with the Company for the purchase of product shall be deducted from my
final paycheck.
(d) FTO. I will be paid for any earned by unused Flexible Time Off
benefits, less all required and authorized deductions, with my last paycheck.
(e) Cobra; Life and Disability Insurance Policies. After the
Termination Date, I may elect to pay for COBRA medical and dental plan
continuation coverage for eighteen months, until I am entitled to Medicare, or
until I am covered under other plans with no pre-existing exclusion. The Company
will provide further information about my COBRA rights after the Termination
Date. The Company will also provide me with information on the potential for
continuation of the disability and life insurance coverage currently provided to
me through the Company if I pay the premiums for such coverages.
3. Stock Options; Extension of Time to Exercise. As of the Termination
Date, I am vested in 40,630 options to purchase the Company's common stock, at
an exercise price of $3.48 per share. I understand that I will not continue to
vest in any more options, that any of my rights to unvested options shall
immediately terminate, and that the vested options will continue to be governed
by the Gargoyles, Inc. 1995 Stock Incentive Compensation Plan, as Amended and
Restated on July 22, 1996, except that the Plan Administrator has extended the
time for me to exercise my options until December 31, 1998.
4. Execution of Promissory Note. I acknowledge that as an accommodation
to me the Company has made payments on my behalf to U.S. Bank totaling
$14,215.03 to U.S. Bank under the terms of a promissory note made by me in favor
of U.S. Bank in connection with the purchase by me of common stock of the
Company in March 1995. Upon the execution of this Agreement, I will execute a
promissory note in favor of the Company in the form of the attached Exhibit A
(the "Note"), evidencing my obligation to repay the Company all sums owing the
Company in accordance with the terms of the Note.
5. Complete Release of Claims. By signing this Agreement, I agree not
to start any lawsuits, charges, or other legal action against the Company
relating to my employment with the Company or the benefits that I received or
should have received from the Company. In addition, I, for my self and my heirs,
representatives, executors, and successors, waive any rights or claims I may
have against the Company, any employee benefit plans sponsored by the Company in
which I participate, and all of the Company's affiliated and related entities,
owners, shareholders, officer, directors, trustees, agents, employees,
employees' spouses, insurers, either past or present, and all of their
successors, agents or assigns (collectively "Releasees"). I hereby release the
Releasees from any and all claims,
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actions, causes of action, obligations, costs, expenses, damages, losses, debts,
and demands, including attorneys' fees and costs actually incurred (collectively
"Claims") of whatever kind, in law or in equity, known or unknown, suspected or
unsuspected, which arose prior to the Termination Date.
This release includes, but is not limited to: (i) any Claims under any
local, state or federal laws regulating employment, including without
limitation, the Civil Rights Acts, the Americans with Disabilities Act, the
Workers' Adjustment and Retraining Notification Act, and the Washington State
Law Against Discrimination; (ii) Claims under the Employee Retirement Income
Security Act; (iii) Claims under any local, state or federal wage and hour laws;
or (iv) Claims alleging any legal restriction on the Company's right to
terminate their employees, or personal injury claims, including without
limitation wrongful termination, discrimination, harassment, breach of contract,
defamation, tortuous interference with business expectancy, black listing, or
infliction of emotional distress, whether arising under statute or common law.
6. Effect of Prior Agreements. I understand that as of the Termination
Date the Employment Agreement is terminated and is superseded by this Agreement,
and that I shall have no further rights or obligations under the Employment
Agreement except for the terms set forth in Sections 7 through 9 of the
Employment Agreement relating to "Intellectual Property; Nondisclosure of
Confidential Information; Covenant Not to Compete, Dispute Resolution, and
Enforcement:, which shall remain in effect following the Termination Date in
accordance with their terms.
7. Nondisparagement; No Solicitation. I pledge that I will make no
statement in disparagement of the Company or any of the Releasees which is
intended to damage the reputation of the Company or any of the Releasees;
including, but not limited to, private or public comments, statements, or
writings critical of the Company or any of the Releases or complaints filed
against the Company or any of the Releasees with any regulatory agency. In
addition, I agree not to interfere with the working relationship of the Company
and any of its employees, and for a period of two (2) years after the
Termination Date, I specifically agree not to seek to hire or to hire any sales
employee of the Company to work for me or for my future employer(s) without the
express written consent of the Company.
8. Consultation with Legal Counsel. I have carefully read all of the
provisions of this Agreement. I further acknowledge that the Company has
encouraged me to review and discuss all aspects of this Agreement with legal
counsel and that I have taken advantage of that opportunity to the full extent
that I deem appropriate.
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9. Voluntary Agreement. I understand and acknowledge significance and
consequences of this Agreement, that it is voluntary, that it has not been given
as a result of any coercion, and expressly confirm that it is to be given full
force and effect according to all of its terms, including those relating to
unknown Claims.
10. Successors This Agreement shall be binding upon the parties hereto
and their heirs, representatives, executors, administrators, successors and
assigns, and shall inure to the benefit of each and all of the Releasees, and to
their heirs, representatives, executors, administrators, successors and assigns.
11. General Provisions
(a) Governing Law. This Agreement is made and entered into in the
state of Washington and shall in all respects be interpreted, enforced and
governed under the laws of the state of Washington. The language of all parts of
this Agreement shall in all cases by construed as a whole, according to its fair
meaning, and not strictly for or against either party.
(b) Invalidity. If any of the provisions of this Agreement are
held to be illegal or invalid, the remaining provisions shall not be affected
thereby, and the illegal or invalid provision shall be deemed not to be a part
of this Agreement. I understand, however, that if the "Complete Release of
Claims" section is held to be illegal or unenforceable in whole or in part, the
Company may elect to rescind this Agreement and demand reimbursement of all
consideration paid to me pursuant to the Agreement.
(c) Entire Agreement. Except for the provisions of the Employment
Agreement which survive the Termination Date, this Agreement represents and
contains the entire understanding between the Company and me in connection with
my separation from the Company. I acknowledge that I have not signed this
Agreement in reliance on any promise, representation, or statement not contained
herein.
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12. Non-Admission of Liability. This Agreement shall not be construed in
any way as an admission by the Company of any liability or wrongdoing
whatsoever. Likewise, this Agreement shall not be construed in any way as an
admission by me of any misconduct or impropriety.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
February 2, 1998.
GARGOYLES, INC.,
a Washington corporation
S/S XXXXXXX X. XXXXX
By_____________________________
Xxxxxxx X. Xxxxx, President
S/S XXXXX XXXX
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Xxxxx Xxxx
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EXHIBIT A
PROMISSORY NOTE
$14,215.03 February 2, 1998
FOR VALUE RECEIVED, the undersigned Xxxxx Xxxx ("Borrower") does hereby
promise to pay to the order of Gargoyles, Inc. ("Gargoyles"), in lawful money of
the United States of America, the principal sum of Fourteen Thousand Two Hundred
Fifteen and 03/100 Dollars ($14,215.03) together with interest thereon from the
date hereof until paid in full as stated herein.
1. Interest Rate. The outstanding principal balance of this Note shall
bear interest at a rate equal to 5.75% per annum.
2. Maturity. The entire principal balance of this Note, plus all
accrued and unpaid interest, and all other amounts owing hereunder, shall be due
and payable in full on February 2, 1999.
3. Application of Proceeds from Sale of Gargoyles Stock; Prepayment. So
long as this Note remains unpaid, if at any time Borrower receives payment on
the promissory note dated March 7, 1997, in original principal amount of
$18,756.24 made by Xxxxxxx X. Xxxxx in favor of Borrower in connection with the
exercise of the Xxxxx Options (the "Xxxxx Note"), all net proceeds received by
Borrower under the Xxxxx Note, shall be applied to the repayment of this Note.
Each payment hereunder shall be applied first to the payment of interest then
accrued on the unpaid balance under this Note, and the remainder, if any, shall
be applied to the reduction of principal. This Note may be prepaid in whole or
in part at any time or times with no prepayment penalty or additional cost of
any kind. Upon payment in full of the principal and accrued interest thereon,
this Note shall be canceled, and shall be of no further force or effect, and
shall be returned to Borrower.
4. Default; Default Interest Rate. This Note shall be in default if
Borrower fails to pay this Note when due or fails to pay or perform any of his
obligations hereunder. If a default occurs, the holder of this Note shall be
entitled to declare the entire unpaid principal balance and all accrued and
unpaid interest thereon immediately due and payable and may proceed to protect
and enforce its rights either by suit in equity and/or law or any other
appropriate proceedings, whether for the specific performance of any covenant or
agreement contained in this Note. After such default the principal balance shall
bear interest at a rate per annum of eighteen percent (18%) until the default is
cured.
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5. Attorneys' Fees and Costs. If a default occurs hereunder and this
Note is placed in the hands of an attorney for collection of any amount called
for herein, Borrower shall be liable for all costs of collection, including
without limitation reasonable attorneys fees and costs.
6. Rights Cumulative. The rights and remedies of the holder of this
Note and any instrument securing payment hereof, shall be cumulative and
concurrent, and may be pursued individually, successively, or together against
the property described in any instrument securing payment hereof, or any other
funds, property or security held by the holder for the payment hereof or
otherwise at the sole discretion of the holder. The failure to exercise any such
right or remedy shall in no event be construed as a waiver of release of said
rights to remedies or of the rights to exercise them at any later time.
7. Applicable Law. This Note shall be construed according to the law of
the state of Washington.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed as
of the date first written above.
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Xxxxx Xxxx
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